Back to top

Analyst Blog

O’Reilly Automotive Inc. (ORLY - Analyst Report) announced that its Board of Directors has approved a resolution to boost the authorization under its share repurchase program by an additional $500 million. The additional authorization, beginning on August 10, 2012, is effective for 3 years.

During the first half of the year, the company  repurchased 6.3 million shares at an average price of $94.52, reflecting a total investment of $594 million. Subsequent to the end of the second quarter until July 25, 2012, it  repurchased an additional 3.1 million shares at an average price of $85.48, implying a total investment of $267 million.

Since the inception of the share repurchase program in January 2011 until July 25, 2012, O’Reilly has repurchased 25.3 million shares at an average price of $72.67, reflecting a total investment of $1.84 billion.

The company last increased the authorization under the repurchase program by an additional $500 million on June 1, 2012. With the additional authorization of $500 million, the cumulative authorization under the program went up to $2.5 billion.

The company  earned $1.15 per share in the second quarter of 2012, a robust 20% increase from 96 cents in the last year quarter and inched past the Zacks Consensus Estimate by a penny. Net income increased 9% to $146 million (9.3% of sales) from $134 million (9.0%) in the second quarter of 2011.

Sales for the quarter rose 6% to $1.56 billion from $1.48 billion a year ago, almost in line with the Zacks Consensus Estimate of $1.57 billion. Comparable store sales (change in sales for stores open at least one year) scaled up 2.5% compared with 4.4% in the second quarter of 2011.

O’Reilly has projected earnings per share of $1.25 to $1.29 and consolidated comparable store sales to increase in the range of 1% to 3% for the third quarter of the year. For full year 2012, the company anticipates earnings per share in the range of $4.56 to $4.66 and consolidated comparable store sales to increase by 3% to 5%. This compared with the previous guidance of $4.47–$4.57 and 3% to 6%.

The company reiterated its revenue guidance of $6.15 billion–$6.25 billion, gross margin guidance of 49.4%–49.8% and operating margin guidance of 15.4%–15.9% for the year. It has also reiterated its capital expenditures guidance of $315 million to $345 million but raised free cash flow guidance to $725 million to $775 million from $700 million to $750 million for the year.

O'Reilly, a Zacks #3 Rank (Hold) stock, is the third largest specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the U.S., selling products to both Do-it-Yourself (DIY) customers and Do-it-for-Me (DIFM) or professional installers. Its main competitors include Advance Auto Parts Inc. (AAP - Analyst Report), AutoZone Inc. (AZO - Analyst Report) and Pep Boys - Manny, Moe & Jack (PBY - Snapshot Report).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
QIHOO 360 T… QIHU 95.04 +4.95%
PILGRIMS PR… PPC 31.52 +3.72%
WILLIAMS(C)… CWEI 138.97 +3.55%
FLAMEL TECH… FLML 14.02 +3.16%
CALLON PETE… CPE 11.50 +3.14%